VU Answer Providing ECO401 Assignment 1 Solution 2022. Easy to See and Get A Perfect ECO401 Assignment 1 Spring 2022 Solution PDF File Download Below.
ECO401 ASSIGNMENT 1 SOLUTION SPRING 2022
Provide by VU Answer
Due Date: 3 June 2022
Total Marks: 10
The Case:
BigPharma is one of the leading industry providing medicines in all over the world. This industry spends a massive amount on research and development in the field of medicine. Revenue of this industry was estimated at 610 billion Dollars in 2021. Most of the drugs of BigPharma are patented. Recently BigPharma introduced the ViraBloc drug which is very effective for the new corona-virus variant Theta. This industry has decided not to patent this drug. This act will be useful for the consumers because in this way, more producers can produce this drug which will be good for consumers. The International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), also known as trade association for the innovative biopharmaceutical industry, assured that by the end of 2022, enough vaccinations would be available to immunize everyone. They predicted that supply would likely to exceed demand.
Suppose Demand function of this industry is given as follows:
Qd= 75-20P+ 2P2
Where ‘P’ is the price in dollars and ‘Qd’ is quantity demanded.
Requirements:
Calculate price elasticity of demand when price is 4 dollars. Also, interpret the result.
Solution:
𝑄𝑑 = 75 − 20(4) + 2(4)2
𝑄𝑑 = 75 − 80 + 32
𝑄𝑑 = 27
Calculate total revenue of the industry by using above information in part (a).
Solution:
𝑇𝑜𝑡𝑎𝑙 𝑟𝑒𝑣𝑒𝑛𝑢𝑒 = 𝜋
𝑤ℎ𝑖𝑐ℎ 𝑒𝑞𝑢𝑎𝑙 𝑡𝑜 𝜋 = 𝑃 × 𝑄
= 4 × 27
= 108
If price elasticity of demand of ViraBloc becomes -15/14 then how this will affect the price of ViraBloc?
Solution:
𝑑𝑒𝑚𝑎𝑛𝑑 𝑜𝑓 𝑉𝑖𝑟𝑎𝐵𝑙𝑜𝑐 𝑏𝑒𝑐𝑜𝑚𝑒 – 15/14
𝑑𝑖𝑣𝑖𝑑𝑒 𝑏𝑜𝑡ℎ 𝑤ℎ𝑖𝑐ℎ 𝑖𝑠 𝑒𝑞𝑢𝑎𝑙 𝑡𝑜 − 1.0714 Elastic
We know that when the answer lies in the center it's called unitary.
So, the demand increase, and their total revenue decrease.
Check Also Important Materials
PLEASE NOTE:
Don't copy-paste the same answer.
Make sure you can make some changes to your solution file before submitting copy-paste solution will be marked zero.
Before submitting an assignment must check your assignment requirement file.
If you need some help or question about files and solutions feel free to ask.
Share with fellows
0 Comments